MCWD open to private water suppliers to stabilize supply

CEBU, Philippines — The Metropolitan Cebu Water District (MCWD) said it is open to welcoming Aboitiz InfraCapital Water Inc. as a potential bulk water supplier, as Cebu’s largest utility accelerates efforts to stabilize supply and curb mounting system losses that have been weighing on its finances.

MCWD chairman Ruben D. Almendras, said interest from large infrastructure groups such as Aboitiz InfraCapital Water reflects the growing urgency to expand Cebu’s water sources as demand continues to outpace the district’s own production capacity.

“Major groups are now looking at Cebu because the need is real,” Almendras said. “We are open to private sector participation, provided the projects are commercially viable and supported by the necessary transmission infrastructure.”

Aboitiz InfraCapital Water, the water and wastewater arm of Aboitiz Equity Ventures Inc., has been expanding its footprint nationwide as part of the conglomerate’s infrastructure push. The company has been assessing opportunities in key growth centers, including Cebu, where industrial estates, tourism hubs and residential developments continue to drive water consumption.

According to Almendras MCWD currently relies on a mix of its own groundwater and bulk water purchases, but its ability to take in more privately supplied water remains constrained by limited transmission lines, Almendras said. Some proposed facilities in Mactan Island, for instance, have production capacities of up to 25,000 cubic meters per day, similar to large-scale desalination plants in Singapore, but MCWD can only accept about 5,000 cubic meters because of bottlenecks in the pipeline network.

“We know the technology works. The issue is not the quality of the plants — it’s the lack of infrastructure to move the water to where it’s needed,” Almendras explained.

Almendras said, adding that excavation permits and right-of-way issues have delayed pipeline projects critical to unlocking new supply.

The district’s financial position has also sharpened the push to bring in private partners. MCWD’s non-revenue water lost to leaks, theft and metering errors — stood at about 39 percent in 2024 and has since been reduced to around 32 percent, Almendras said. Even so, losses still translate to roughly PHP 500 million a year in foregone revenue.

“Every percentage point we don’t recover is money literally thrown away,” he said, noting that international best practice is to bring non-revenue water down to about 18 percent.”

High bulk water prices have further strained MCWD’s balance sheet. Some suppliers charge as much as P70 per cubic meter, above the utility’s own selling price once blended with water from MCWD’s wells, which still account for about 48 percent of supply.

“That’s not sustainable. Even on a weighted average basis, the cost of water is higher than what we sell it for,” Almendras said.

To make new investments bankable, MCWD is pushing for regulatory approval of a new rate structure that would allow it to recover costs and fund network upgrades. The district is proposing a progressive tariff system under which heavier users pay more per cubic meter, a model Almendras said would both improve revenues and encourage conservation.

“The more you consume, the more you pay. That’s how you send the right signal and stop wasting water,” he said, citing similar pricing structures in major US cities.

For companies such as Aboitiz InfraCapital Water, the reforms could open the door to large-scale projects that would help close Cebu’s supply gap while offering predictable returns. For MCWD, private sector capital and expertise are increasingly seen as essential to modernizing a network that is struggling to keep up with one of the country’s fastest-growing urban regions.

“If we fix the tariffs, reduce losses and build the transmission lines, then serious investors will come in,” Almendras said. “Cebu needs that partnership to secure its water future.” — (FREEMAN)